The impact of governance, innovation, and macroeconomic factors on renewable energy generation in ASEAN: a Bayesian approach

This study investigates the influence of governance, innovation, and macroeconomic factors on renewable energy generation in ASEAN (2002–2022). It examines how economic growth, education, governance quality, capital formation, oil rents, foreign direct investment (FDI), and innovation influence renewable energy generation. By employing Bayesian regression, the results reveal that higher economic growth boosts renewable energy generation, while governance and capital formation negatively impact it. FDI and innovation also negatively influence renewable energy generation, indicating gaps in attracting FDI and translating innovation into practice. Policymakers need to promote equitable wealth distribution and enhance governance frameworks. The results also emphasise the importance of targeted policies to promote sustainable energy development by redirecting investments towards green sectors and utilising oil rents for renewable energy projects. Additionally, improving intellectual property protection and providing support for small enterprises in the renewable energy sector enhance the practical application of innovations. These strategies are crucial for advancing renewable energy development in ASEAN, contributing to a sustainable energy future.This study provides important empirical insights into the factors influencing renewable energy generation in ASEAN countries between 2002 and 2022. Using Bayesian panel data regression, the findings show that economic growth (GDP per capita) supports renewable energy generation, whereas governance quality, capital formation, foreign direct investment, and innovation (as measured by patent registration) currently hinder its progress. These findings challenge conventional assumptions and expose structural and institutional barriers to renewable energy development in the region. Besides, the impact of education expenditure appears to be long-term and may require complementary policies to translate educational outcomes into practical advancements in renewable energy. Additionally, although oil rents offer financial resources, they are not effectively allocated toward renewable energy development, underscoring the need for strategic policies to channel oil revenues into renewable energy initiatives and R&D. This study offers timely, evidence-based insights to guide policymakers in ASEAN as they navigate the transition to a low-carbon future. By identifying key influencing factors, the findings support the formulation of targeted strategies to strengthen regulatory frameworks and promote sustainable energy development. Ultimately, this research contributes meaningfully to ASEAN's long-term energy security and environmental sustainability.